Manufacturing slowdown in Oklahoma and nearby states

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Manufacturing in Oklahoma and other states making up the Tenth District of the Federal Reserve Bank of Kansas City slowed in recent weeks as managers complained of shortages of supplies and workers and of COVID-19 vaccination mandates.

The November Manufacturing Survey was released Thursday. Despite the slowdown, Chad Wilkerson, vice president and economist at the Bank said expectations for future activity remain strong.

“Regional factory activity continued to grow but at a slower pace than in recent months,” said Wilkerson. “Many firms reported additional materials cost increases, and more contacts reported delivery time delays compared to a month ago and a year ago. Labor shortages remain a key inhibitor in meeting higher demand for goods.”

The survey found many firms reported additional materials cost increases and some reported delivery time delays compared to a month and a year ago. The report also found that labor shortages remain a key inhibitor in meeting higher demand for goods.


“While production and employment were strong in November, supplier delivery time increased, and the volume of new orders decreased. Finished goods inventories also declined, but materials inventories inched up,” stated the report.

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The report quoted the responses of some managers who were interviewed.

“Costs are out of control. We can’t price our way out of cost increases. As a result – profitability is down – significantly on a per unit basis. The operating environment we are in currently is not sustainable long-term.”

“Raw materials cost increases have hit us HARD. Soybean oil costs have doubled. Packaging is up 40%, etc. Forced to pass this on to the consumer.”

“Business has picked up in spurts. When customers have time, they shop for better pricing. Competition depends on price of course but necessity and availability take precedence.”

“Business is going to be down next year we believe due to high inflation. We sell capital goods and many times the end customer can just wait out their purchase until the price comes back down. The 100-employee vaccine mandate recently put forth by OSHA adds another layer of complexity and uncertainty to our business.”

“We are very concerned that we will lose staff due to the vaccine mandate. We have been told by approximately 25% of our staff that they will not get vaccinated or abide by the mask and weekly testing requirements.”

The Federal Reserve Bank of Kansas City is located in Kansas City, Missouri and covers the 10th District of the Federal Reserve, which includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming, and portions of western Missouri and northern New Mexico.

Source: Bank release

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